Easily-accessible and fact-based reporting of interesting developments about new and pending Section 337 investigations, litigation trends, statistics, practical insights into the Administrative Law Judges, and commentary on important ITC decisions.

On November 21, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion in Certain Polyimide Films, Products Containing Same, and Related Methods (Inv. No. 337-TA-772).

By way of background, this investigation is based on a complaint filed by Kaneka Corporation (“Kaneka”) alleging violation of Section 337 in the importation into the U.S. and sale of certain polyimide films, products containing the same, and related methods that infringe U.S. Patent Nos. 6,264,866 (“the ‘866 patent”), 6,746,639 (“the ‘639 patent”), 7,018,704 (“the ‘704 patent”), and 7,691,961 (“the ‘961 patent”). The Respondents in this investigation are SKC Kolon PI, Inc. and SKC, Inc. (collectively, “SKC”). See our April 4, 2011 post for more details.

On May 10, 2012, ALJ Robert K. Rogers Jr. issued the subject ID finding no violation of Section 337 by SKC with respect to the above-listed patents. See our June 25, 2012 post for more details regarding the public version of the ID. After examining the record of the investigation, including the ID and the parties’ petitions for review and responses thereto, the Commission determined to partially review and partially vacate the ID.

Our August 3, 2012 post provides a summary of the Commission’s determinations. We now provide additional details on the Commission’s determinations of whether Kaneka satisfied the technical prong of the domestic industry requirement in relation to the ‘866 patent and the infringement finding in relation to the ‘961 patent.

The ‘866 Patent

The Commission was particularly interested in whether the ALJ’s analysis of the technical prong of the domestic industry requirement in relation to the limitation “increasing the temperature in a step-wise fashion” was satisfied by the evidence provided at the evidentiary hearing. The Commission summarized the parties’ dispute as “whether ‘intermittent or occasional’ infringement is a ‘substantial investment’ in the articles covered by the patent.” Kaneka argued that satisfying the domestic industry requirement with only intermittent or occasional activity was sufficient because the standard is the same as that for infringement. SKC disagreed that the standards are the same in light of the very different underlying policies, and asserted that the only relevant time for consideration is the time of filing the complaint because Kaneka only asserted an industry that exists, not an industry in the process of being established.

The Commission modified the ALJ’s finding of no domestic industry. Specifically, the Commission determined that arguments as to the “intermittent or occasional” aspects of the device are relevant only to consideration of the economic prong of the domestic industry requirement, and that the inquiry for the technical prong is limited to a comparison of the claim language with the product offered to satisfy the domestic industry requirement. In carrying out this comparison, the Commission found that Kaneka failed to satisfy the “while adjusting” limitation of the ‘866 patent, and thus, the technical prong of the domestic industry requirement was not met. Thus, the ALJ’s initial determination was affirmed.

The ‘961 Patent

The Commission asked for briefing on a very specific issue in relation to the ‘961 patent, namely, whether a person skilled in the art would require all replicates of film samples to be within the claimed range, and whether any statistical concepts of variance would be applied to the claimed range. This issue is important because Kaneka could only prove infringement of some of SKC’s products by averaging the values of the samples to meet the required claim limitations. Kaneka argued that this approach is precisely how one skilled in the art would evaluate replicates; i.e., by considering average values from a group with relatively low standard deviations. SKC’s position is that where there are only a small number of replicates, those skilled in the art would require that all replicates be within the claimed range in order to consider the test results reliable.

The Commission notes that Kaneka’s own expert made statements that the data from the tests was unreliable. Since there was no other information in the record, the Commission agreed with the ALJ that Kaneka failed to prove infringement for the accused products that relied on this testing. Thus, the ALJ’s initial determination was affirmed.

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